In a significant development, the government has given conditional approval to Reliance’s KG-D6 budget of over USD 1 billion for the years spanning from for FY11-13. CNBC-TV18’s Nayantara Rai reports that this breakthrough was achieved after a two and a half hour long meeting of the management committee, which has representatives from RIL, British Petroleum, the Oil Ministry and DGH.
Sources say that the government, that is the Oil Ministry and the DGH, have agreed to give Reliance Industries a conditional approval for its budget. The point to note here is that it is a conditional approval, dependent on what RIL will get back to the Oil Ministry with. This is because certain questions have been raised and certain clarifications sought on some of the cost heads that have been mentioned in the budget submitted by Reliance Industries to the government. Also, RIL’s three discoveries at KG-D6 - D29, D30 and D31 – have also got a conditional approval. Again, clarifications have been sought from RIL, and we will see a final approval once the company gets back to the government on those issues. Some action also came through on RIL’s arbitration move against the government. Remember that there was a deadlock between the Oil Ministry and Reliance Industries due to cost recovery issues. The government was looking to slap RIL with a notice of about USD 1.2 billion, limiting its cost recovery. RIL had pre-empted that, and had invoked arbitration against the government. It had appointed former CJI SP Bharucha as its arbitrator, but when the Oil Ministry refused to appoint an arbitrator, Reliance had gone to Supreme Court. That matter also came up before the SC today, and the apex court has decided to dispose of that petition after recording that former CJI SP Bharucha will be RIL’s arbitrator and former CJI VN Khare will be the government’s arbitrator. These two arbitrators will finalize a third neutral arbitrator, so there could be some forward movement as far as arbitration is concerned soon. RIL sources say the government is serious about granting the KG-DG approvals, and that the DGH and Oil Ministry is intent on moving forward.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
